Russia’s Deteriorating Position

The Bubble of Russian power, that hit a post-1989 high during the first stages of the Olympic War, is crashing hard. The credit crisis has hurt Russia (a Gap country with a shallow facade of connectedness) hard, the Russian stock market is repeatedly suspended for days at a time, oil prices have fallen nearly 50% since Russia’s attack on the Southern Energy Corridor, and Putin’s acts of self-sabotage have driven away the investment income that once threatened to make Russia a powerful country.

A symbolic area of conflict for the Russian state are international recognition for Kosovo (carved from her former satellite, Serbia) and Abkhazia (carved from her enemy, Georgia). On 9/11/08, I wrote that Abkhazia was currently recognized by the “feared Russian-Nicaraguan Axis“…

.. though Belarus has toyed with recognizing the statelet.

A month later, Abkhazia is recognized by her allies Russia and Nicaragua, and hopes for Belarus to join too.

Countries on every continent have recognized Kosovo. 22 of 27 European Union states have recognized Kosovo. 22 of 26 NATO countries have recognized Kosovo. 4 of the 6 former constiuent republics of Yugoslavia recognize Kosovo. 4 of Kosovo’s 5 neighbors recognize it.

Abkhazia has been recognized by Russia, and Nicaragua, and that’s it. Though one day soon, mighty Belarus may join, too.

Heck, a Finnish President who oversaw the UN process that Serbia rejected (and thus led to the recognition of Kosovo) is now a Nobel Peace Prize Winner.

Of course, recognition is a symbolic act, like cocking a gun is a symbolic act. More substantial acts are those which makes it hard for Russians to invest directly in the west, makes it risky for western countries to invest directly in Russia, encouraging investment in Georgia, Ukraine, Azerbaijan, and Moldova, and so on.

Still, it’s important not to blow Russia out of important. Russia is a threat to its smaller neighbors, but to us it’s just a belligerent version of Portugal. Moscow is a problem to be managed, and a bad actor to deter and contain. It’s not a country to fight a Cold War (or, for that matter, insist on detente) with.

17 thoughts on “Russia’s Deteriorating Position”

As this economic crash has spread to Russia I’ve been thinking more and more and about this video of George Friedman talking about his new book [1]. Friedman predicts that there will be a new cold war between Russia and the U.S. and that, similar to what happened to the Soviet Union, Russia will fall when her economy collapses and several regions breakaway leaving a rump state surrounding Moscow while Siberia will be increasingly dominated by China and Japan.

While many of Friedman’s ideas are questionable (this is the man who released a book in 1990 entitled “The Coming War With Japan”) the idea that Russia’s borders could contract once again in the wake of a massive economic shock may prove prescient.

Abkhazia was at least an ASSR, an entity of ambiguous legal standing in the Soviet Union [1]. South Ossetia is just a chunk of land that Russia wanted to annex.

The case of South Ossetia is too laughable to compare to any existing independent country.

Brent,

I’ve thought about the collapse of Russia before. [2] Her population collapse, growing Muslim population, and rapidly growing illegal Chinese population near the Pacific Ocean are grave dangers to her territorial integrity.

Of course, that is good for nearly everybody else.

Doug,

Excellent link!

From the article:

Oct. 10 (Bloomberg) — Russian billionaires from aluminum magnate Oleg Deripaska to soccer-club owner Roman Abramovich lost more than $230 billion in five months during the nation’s worst financial crisis since the 1998 default on its debt.

The combined wealth of Forbes magazine’s 25 richest Russians tumbled 62 percent between May 19 and Oct. 6, based on the equity value of traded companies and analysts’ estimates of closely held assets they own. The loss is four times larger than the fortune of the world’s wealthiest man, Warren Buffett.

Moscow’s benchmark Micex stock index declined 61 percent since its peak in May. The global credit seizure, war with Georgia and falling commodity prices led foreign investors to pull $74 billion out of Russia since early August, according to BNP Paribas SA. While Russia’s 1998 default and devaluation of the ruble eradicated savings for most of the population, this year’s losses are wiping out its richest citizens’ fortunes.

I wonder if we will soon see whether Putin is indeed just the CEO of Russian inc (and subject to removal for incompetence), or something closer to Saddam Hussein.

“Russia has about 20 million hectares of unused arable land, an area the size of England and Wales and equal to 40 percent of all current farmland in the country. Siberia accounts for a fifth of all Russian farmland and has reclaimed into cultivation more land lying fallow than anywhere else in the country this year. ” [1]

“This is a tragedy of huge proportions — but not a particularly surprising one, at least to me. I followed population, health and environmental issues in the Soviet Union for decades, and more recently, I have reported on diseases such as the HIV/AIDS epidemic ravaging the Russian population. I’ve visited Russia more than 50 times over the years, so I can say from firsthand experience that this national calamity isn’t happening suddenly. It’s happening inexorably.”

My Fiance’s parents went back to Russia last fall (for the first time in 19 years for her mother). They were disapointed. They saw more wealth in the cities (Novisibirsk is the hometown), but the system is broken. Russian society is sick to its core. The high death-rate among men is the symptom of mass malaise. Russian women abort their children at a rate of 50 fetuses per 100,000, DOUBLE, the next highest country. The Russian state is in for a severe and rapid crisis over the next 50 years. Between all the natural sources there and their technilogical and nuclear abilities (even wounded), it will be a massive problem for the rest of us, Europe and China especially. I just don’t see how they maintain control of their far east in through the century.

The frontiers between Russia and China are not set in stone. The Chinese have ruled Central Asia before, as recently as the Great Qing’s conquest of the Dzunghar Confederacy in Turkestan [1,2], not to mention Outer Manchuria [3].

In the past, we saw a scramble for Africa and a scramble for Asia. We are in the long process of a scramble for Russia, as the collapsed Tsarist state is divided up by Core powers while this-or-that Gappish center tries to disconnect some part of it from time to time.

There still isn’t a decent highway between Moscow and St. Pete’s. Ideally, Russia would be sinking a lot of its’ cash from the high oil prices into infrastructure (beyond big buildings in Moscow) as well as encouraging foreign investment; while at the same time offering incentives for immigrants.

Unfortunately, the cash has lined the pockets of the corrupt or gone to pet projects and now has to be used on the financial system. The government’s treatment of BP and other companies has all but guaranteed that foreign investment won’t be back for a while. As for immigrants, ask anyone with dark features in Moscow how that would work out. Xenophobia is out of control, the government’s attempt to harness it through organizations like Nashi only encourage it.

Unfortunately, it will only get harder and harder to visit my fiance’s homeland in the future as the middle of Siberia is no where to be without a good escape plan.

That proposal was really just a joke. If the US were to buy a bunch of Siberia, it would put us in direct conflict with China since I suspect that they are patiently waiting for Russia’s demographic decline and political decay to cause Siberia to drop into their lap in a few decades.

On the other hand, having a long land border with the United States might actually be a good thing for China, assuming that $7 billion only buys the western 1/4 to 1/3 of Siberia leaving the rest for the Chinese to take over as the Russians slowly commit demographic suicide.

“On the other hand, having a long land border with the United States might actually be a good thing for China, assuming that $7 billion only buys the western 1/4 to 1/3 of Siberia leaving the rest for the Chinese to take over as the Russians slowly commit demographic suicide.”

George Will suggested a Siberia in the 1990s, and there was talk of Germany buying Kaliningrad (Konigsberg).

Those opportunities are lost, but we can still ‘buy’ (spend resources to acquire influence over) Georgia, Ukraine, Azerbaijan, Moldova, and even Belarus and Armenia, from Russia by a wise use of subsidies, trade, peace with Iran, and other assistance.

@Brent Grace how do you its gonna be Russia, the USSR which was one of the two unions in the first cold war broke up and we are now left with USA, in the next cold war there will be one union and how do we know its not gonna fall apart into smaller states with Alaska being dominated by Russia, Texas, California and Arizona being dominated by Mexico we just have to wait and see.